At this year’s Dealer Expo, I presented a “Service 101” seminar where I divided the content into three areas of discussion:
• Get It In: Best practices to attract and capture service work
• Get It Right: Best practices for achieving high service proficiency
• Don’t Give It Away: How to reduce risk and avoid expensive lawsuits.
The well-received “Don’t Give It Away” section focused on the seven high-risk areas of dealership product liability. Before I get into this, however, there are a few general thoughts I want to share. 1.) Morally, we should make customer safety our No. 1 priority — motorcycles are supposed to deliver pleasure, not pain. 2.) Collectively, dealership personnel should be aware that anyone in the store can be named in a product liability suit. 3.) Realistically, product liability cases represent huge economic potential, with millions of dollars paid out annually in legal fees and settlements. Expect the plaintiff’s (injured party) legal team to work diligently to get every dollar they can from you. 4.) Astoundingly, in most states, it is inadmissible to use rider error, even if it relates to rider impairment, as evidence in a product liability case. The court will focus on your actions; making you prove your work was “free of defect and reasonably fit for use.” 5.) Regrettably, there is no perfect way to keep from being sued, but you can reduce the financial impact by implementing better practices.
What follows is derived from information gathered over the years from a variety of motorcycle-industry professionals; some of whom are legal experts. That said, I must state that I am not a lawyer. If you need legal help, get professional legal advice from an attorney who practices product liability/personal injury law. These are excerpts from two of the seven high risk areas covered in my Dealer Expo seminar.
To ensure the vehicle is operating properly, perform the vehicle set-up according to the manufacturer’s Pre-Delivery & Inspection (PDI) manual that includes detailed vehicle assembly, adjustment and inspection procedures. After completion, test ride the vehicle for several miles to verify it performs “As a proper representation of the product.” It’s also a good practice to note the road test miles and the route taken.
Know that in a product liability case, the plaintiff’s legal team will inspect the wrecked vehicle, looking for anything that was not assembled or adjusted per the manufacturer’s set-up procedures. Non-factory modifications and improper set-up can swing the majority of the responsibility onto the dealership. And note, there is no good reason for a technician doing it “their way” when a manufacturer’s PDI manual is available. Most courts will presume the vehicle manufacturer knows the best set-up procedures, so follow the PDI manual to reduce your risk. If you believe the PDI manual is incorrect, contact the vehicle manufacturer to report it.
Additionally, the technician who performed the set-up should check or initial each procedure they performed and then sign the form. If the shop does end up in court, the tech will have to testify what he did, how he did it, and why. A properly completed PDI form can be helpful to your defense.
In court, the written word is what lawyers take to the bank. If the dealership is sued, the plaintiff’s legal team will pull the service documents associated with the case. Visual inspection sheets, repair orders and technician notes are just some of the documentation that will be scrutinized. That’s why service documentation should be an accurate representation of all transactions.
• Visual Inspection sheet: Note the vehicle’s condition when received, such as mileage, tire pressure, fluid levels, leaks, wear, signs of abuse or accident and any cosmetic damages, just to name a few. Write “Customer states, ____________” in their words to describe an issue they reported.
• Repair order: Individually list every repair or service performed and the parts installed. If it’s a routine event such as a 5,000-mile service, then you should have a separate sheet identifying the actions and inspections of that routine service event. If it’s a repair, be specific as to what was performed; for example, “Replaced rear brake pads” is specific — “Fixed brakes” is not. Note additional repairs needed and have the owner sign/initial that he understands the risk and is taking responsibility for declining to have needed work done now. Make sure the individual who signs the R.O. is the vehicle’s legal owner.
• Technician notes: Notes on paper or in the computer can be subpoenaed for evidence. Be like Joe Friday (Famous 1960’s TV detective) and write, “Just the facts.” Review notes from a devil’s advocate point of view. Could the court interpret what was written to have put the plaintiff at risk? If so, rewrite it before you file it. And, keep in mind that altering the documents after a suit has been filed could get you in a lot more trouble.
This has been a mile-high view of a very important aspect of doing business. If, for any reason you think you’re engaging in risky behavior, you should hire an attorney for a professional legal opinion. After all, you don’t want to give it away — after you worked so hard to get it.
WAIVERS ARE NOT A RELEASE
A waiver signed by the vehicle owner admitting he knows the repair or modification you performed was unsafe does not release you from your responsibility to make the vehicle, “Free of defect and reasonably fit for use." If a customer wants you to perform work you know is unsafe (E.G. Chrome plating the brake rotors), don’t do it. There is no solid defense for a service professional who knowingly performs unsafe work – even if the customer said it was, “OK.”
This is the full version of a story originally that appeared in the Dealernews May 2012 issue.